The Case Against a Wealth Tax in Scotland: An Analytical Perspective

London, United Kingdom Jul 13, 2026 ALN: DOES the UK, or Scotland come to that, need a wealth tax? It is a question that almost everybody on the left of politics is asking and suggesting that the answer to is yes.

I know of only two people who are really holding out. I am one of them, and William Thomson, who also writes for The National, is another.

The issue became more topical this week because Gary Stevenson, the former City millionaire banker who has been promoting the idea of a UK wealth tax, had his documentary on the subject aired on Channel 4.

Entitled How To Get Filthy Rich With Gary Stevenson, for reasons that make no sense to me whatsoever, this was, according to all the impartial reviews I have seen, and in my opinion, a bit of a disaster.

Gary did, unfortunately, come across as something of a headless heart, as most tax justice campaigners do these days. By that, I mean his desire to relieve poverty and his belief that a wealth tax could assist this goal are undoubtedly well placed and emotionally justified.

But, as became apparent as the programme progressed and he was required to argue against opponent after opponent, all of whom outwitted him, he has not thought through what a wealth tax in this country might mean, or what the consequences might be.

I regret this because I have long argued that we do need to tax the wealthy far more in the UK.

I published a report on this issue in 2024, the vast majority of which remains as relevant now as it was then. When I started work on this, publishing it as a series of blog posts, I had no idea that the final work would run to more than 120,000 words and include more than 30 recommendations for tax reform.

All of these were based on restructuring the existing tax system, using information already available in tax returns submitted to HM Revenue & Customs to reduce costs for everyone involved.

Unlike Gary, who wants a new wealth tax but has admitted that he does not know how such a tax might work, I was intent on delivering something that I knew could work and would not require major changes to the tax return, or the demands (except for payment) on taxpayers, and which could be implemented in stages over time to effect the changes that I want.

The result was a series of recommendations, not just one new tax, and the net outcome of all my changes, if all had been adopted, would have been an additional £90 billion in tax revenue for HMRC each year.

This contrasts with Gary’s estimate of the revenue from a wealth tax of £24bn. If the aim of any change was to redistribute the UK tax burden on to those best able to pay it, my suggestions were, by a long way, more ambitious than Gary’s.

I stress, though, that I am not too sure that any UK government currently requires an additional £90bn a year. I made a range of suggestions because I wanted to offer any government committed to social justice the chance to raise extra money in ways that could tackle the gross injustice that exists at present and be easily implemented.

How big is that tax injustice? It is far too large, as those on very low earnings in the UK usually pay tax at much higher overall rates than those with the highest incomes.

In fact, as my research showed, it is normal for a person with average or below-average earnings in the UK to pay tax at rates in the mid-to-high 30% range, taking all forms of taxation into account and considering their combined earnings and capital gains.

In contrast, those in the top 10% very often pay tax at a little over 20% in total, having taken both their income and capital gains into account. This was the tax rate that was, ironically enough, paid by former prime minister Rishi Sunak when he published his last tax return in that role, based on income and gains exceeding £2 million a year.

My estimate was that this injustice resulted in an underpayment of tax by those best off in the UK of at least £170bn a year.

MY proposals, if all had been implemented, might only collect a sum of approximately half that, but would have made a much bigger impact on overall inequality in this country than anything Gary Stevenson and those supporting a wealth tax currently propose.

So, what did I suggest?

The first proposal was to charge the same tax rate on both capital gains and income. This might raise more than £10bn a year.

The second was to charge the equivalent of National Insurance on unearned income exceeding £5000 a year in the UK, because it is ludicrous that, at present, those with unearned income pay a much lower overall tax rate than those with income earned from work.

This proposed tax, which the UK had during the 1970s and 1980s and which would ignore pensions, might, if charged at a rate of 15%, raise £18bn a year.

Charging VAT on financial services, almost all of which are consumed by the wealthy, but which are currently exempt from that tax, could raise £8bn a year.

Restricting the rate of pension tax relief on contributions made to pension funds so that only basic-rate relief was provided to the highest earners could save up to £14bn a year in overall tax. Why should the savings of wealthier people be subsidised at a higher rate than those of anyone else?

Those suggestions alone come to £50bn, so the proposals added up, which was the whole point. The changes could be made in stages, at the government’s discretion, flexibly, and with relatively limited political resistance, because each would be small when introduced, even if the eventual impact could be substantial.

My argument, then, is that we do not need a wealth tax in the UK precisely because we could be so much better off if we taxed income and gains derived from wealth more effectively, and more fairly, to achieve a level playing field in tax in this country so that those who work for a living are not taxed more heavily than those who do not.

And since the cost of implementing the changes I propose would be much lower than the cost of creating and then running a wealth tax, these would be far more efficient ways of collecting tax than a wealth tax could ever be.

What is more, they would be harder to avoid, precisely because the mechanisms to be used to collect them are already tried and tested.

They would also involve much less HMRC time to collect, because a wealth tax would be subject to massive levels of dispute from those best able to employ expensive lawyers to argue with HMRC.

After all, how much is an estate worth, and come to that, what is the value of the silver cutlery in the kitchen?

All would have to be agreed, item by item, if an annual wealth tax were to be introduced, and both evasion and abuse would be hard to detect as well.

So, we need to tax wealth more. That is beyond dispute.

There is massive tax injustice in Scotland and the rest of the UK.

But we do not headless hearts to tackle it. We need cold-headed analysis and targeted measures to reduce inequality and deliver economic justice, and a wealth tax is a very poor way to achieve that outcome.